The stock exchange listing committee meets today to reconsider the proposed listing of China Aerospace International's telecommunications division after rejecting an earlier proposal due to 'grave concerns' the application did not include the results of a loss-making subsidiary.
According to a leaked listing committee document, the application for Casil Telecommunications was rejected at a June 12 meeting for failing to include the results of subsidiary Shenzhen Conien.
Shenzhen Conien lost 8.8 million yuan (about HK$8.16 million) last year and 4.1 million yuan in 1995.
The committee said Shenzhen Conien should have been included in the application as it was engaged in the same line of business as Casil Telecommunications - the sale of switching systems.
The committee said it was not even informed that such a subsidiary existed.
When the results of Shenzhen Conien were included, Casil Telecommunications failed to meet the mandatory three-year minimum profit requirement.
In the document, listing committee executive director Lawrence Fok Kwong-man said: 'It would appear that this treatment has been adopted to enhance the attractiveness of the group as a new applicant for listing.' Mr Fok singled out the listing sponsor, Credit Lyonnais Securities Asia, for failing to verify the application before submission.